Exclusive news and research on the wine, spirits and beer business

Breakthru Steps Up Effort To Dismiss Empire Lawsuit With New Court Filing

January 23, 2017

Late Friday night, Reliable Churchill and Breakthru Beverage Group aimed to bolster their attempt to dismiss the federal lawsuit filed against them by Empire Merchants by filing a memorandum of law that says Empire’s claims are without merit—and that Empire lacks the standing to make them. Not surprisingly, Empire takes a different view.

The memorandum charges that Empire’s suit over allegations of an interstate smuggling scheme involving top Breakthru executives Charlie Merinoff and Greg Baird relies “almost entirely on citations to a dismissed indictment of a company that has not been named as a defendant in this action (Republic National Distributing Company).” It adds that, “after stripping away allegations relating to the dismissed nonparty indictment, reading the declarations for what they actually say—and not what Empire would like them to say—and ignoring Empire’s conclusory allegations, the court is left with the unremarkable story that Reliable (now a part of Breakthru Beverage after it was formed in early 2016 via the merger of Wirtz Beverage Group and former Reliable parent Charmer Sunbelt Group), a licensed Maryland wholesaler, filled the purchase orders of licensed Maryland retailers in compliance with applicable laws. These allegations do not provide Empire with standing to bring a civil RICO claim and otherwise fail to plead facts sufficient to survive a motion to dismiss.”

The memorandum also takes issue with Empire’s claims about Merinoff’s motives. Empire, New York’s largest spirits and wine distributor, said in its initial complaint that Merinoff’s “ultimate goal was to coerce the principals of Empire to cede control of the company as an independent operation by combining it with the larger Charmer Sunbelt Group, which Merinoff controlled.” The memorandum states that Empire’s complaint “does not allege that any acquisition offer was made for Empire until November 11, 2016, almost eight years into the alleged bootlegging scheme, when Breakthru which is not named as a ‘RICO defendant,’ made an offer to acquire Empire. If not altogether implausible, Merinoff’s patience is certainly astounding.”

Empire’s attorneys say Breakthru’s latest court filing is just another attempt to divert attention from their alleged illicit activity. “The Breakthru defendants and their counsel will apparently say or do anything to try to cover up the Breakthru defendants’ participation in this massive bootlegging and‎ retaliation scheme, as detailed in Empire’s racketeering complaint,” said Empire attorney Randy Mastro. “This motion, like the rest of their gamesmanship, will fail, and they will be held accountable for what they have done, as co-conspirators of theirs have now sworn in court documents.”

Merinoff, the longtime CEO of Charmer Sunbelt, has also been a part-owner of Empire since its inception in 2007, when it was created via the combination of Charmer Sunbelt’s and Peerless Importers’ New York operations. Empire is currently owned by the Merinoff/Drucker and Magliocco families. Merinoff is co-chairman of Breakthru, the country’s third-leading spirits and wine distributor, while Baird—formerly a top executive both at Reliable and Charmer Sunbelt—is now Breakthru’s CEO. —Peter Zwiebach

Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.

Tagged : , , ,


Previous :  Next :